Stocks and Shares Junior ISA April 2017 Key Features and Terms and Conditions of the Stocks and Shares Junior ISA This document should be read in conjunction with an up-to-date Key Investor Information Document (KIID) for the fund in which you want to invest. You should read both documents carefully so that you understand and are comfortable with what you are buying, and then keep them safe for future reference. You should always ensure that you have up-to-date copies of both documents before you invest. No advice has been given by Scottish Friendly in respect of this plan. We have not assessed whether this Junior ISA is suitable for your financial needs and therefore you will not benefit from the protection of the Financial Conduct Authority (FCA) rules on assessing suitability. If you are in any doubt about the suitability of this product for yourself, you should contact your financial adviser. Helping you decide What is the purpose of this document? The Financial Conduct Authority is a financial services regulator. It requires us, Scottish Friendly, to give you this important information to help you to decide whether our Stocks and Shares Junior ISA is right for you. You should read this document carefully so that you understand what you are buying and then keep it safe for future reference. What questions should I ask before I open a Junior ISA? In this document we have given you the answers to some important questions. What should I do now? Please read: The Key Features of the Stocks and Shares Junior ISA The Terms and Conditions which is included in this leaflet The Scottish Friendly UK Growth Fund and Managed Growth Key Investor Information Document Please keep this with your investment documentation which we will send you. The Terms and Conditions in this document, together with the application form, form our standard client agreement upon which we intend to rely. For your own benefit and protection you should read these terms carefully before completing the application form. If you do not understand any point, please ask for further information. No advice has been given by Scottish Friendly in respect of this plan. We have not assessed whether this Junior ISA is suitable for your financial needs and therefore you will not benefit from the protection of the FCA rules on assessing suitability. If you are in any doubt about the suitability of this product for yourself, you should contact your financial adviser. Stocks and Shares Junior ISA Page 1 April 2017 Key Features of the Stocks and Shares Junior ISA Its aims To provide a child with a tax-free lump The Managed Growth Fund invests sum at the start of their adult life. in equities and fixed interest securities To achieve growth by investing in both in the UK and other international stocks and shares through a choice stock markets. Fixed interest securities of two investment funds. may comprise government securities such as gilts or corporate bonds and Your investment these may be denominated in sterling If you take out a stocks and shares and other foreign currencies. The use Junior ISA, you can invest up to £4,128 of derivatives, stock lending or borrowing in the current tax year, less any amounts may also take place when deemed subscribed to a Junior Cash ISA with appropriate to achieve the objectives another Junior ISA manager. Scottish of the fund. Friendly only offers investment into a Your money is pooled together with Stocks and Shares Junior ISA. other OEIC investors giving a combined You can invest monthly by Direct Debit purchasing power that means your or you can make a lump sum payment risk is spread across a wide portfolio by cheque or both. The minimum of investments. monthly payment is £10 and the The fund accumulates any income from minimum lump sum cheque is £50. the investment and this is reflected in Anyone, such as parents, grandparents, the daily share price. uncles, aunts or family friends may also Risks contribute to the child’s Junior ISA Once money has been paid into the provided the maximum that is invested Junior ISA, it is locked in. It can only does not exceed £4,128 in the current be taken out by the child when he tax year. or she reaches the age of 18. Any Your money buys shares in the payment made to the Junior ISA Scottish Friendly UK Growth Fund or cannot be returned to the donor. the Scottish Friendly Managed Growth The value of the child’s investment, and Fund, both sub-funds of an Open-Ended the income it earns, can go down as Investment Company (OIEC) called well as up and the child could get back Scottish Friendly Investment Funds. less than you put in. The value of the The UK Growth Fund invests in a wide child’s investment is not guaranteed. range of UK shares. A proportion may If you’re investing regularly for a also be held in cash. particular purpose, you may not achieve your target if you do not keep up your payments. Stocks and Shares Junior ISA Page 2 The tax treatment of Junior ISAs Is this investment right for my child? depends on individual circumstances You should consider this investment and tax law may change in future. if you (or anyone else) wants to make As the two funds available are actively regular payments or a lump sum managed, these funds contain a greater payment into an investment for a child, degree of risk than a fund that simply for whom you have responsibility, and tracks the stock market and will depend where the investment’s performance is on the manager’s ability to select stocks linked to UK and international stocks and and shares that can grow. shares. The funds are not suitable if you do not wish to take any risk with your The Managed Growth Fund is exposed money. Whilst your investment may be to and can hold currencies other than locked away on your child’s behalf for sterling. As a result, exchange rate up to 18 years (depending on the age of movements may affect your investment your child when you set up your Junior as well as price movements. ISA) you should be thinking of investing There are no cancellation rights for over at least five years. this investment. If you are in any doubt about the In some circumstances, for example suitability of this investment for your if the fund is experiencing significant child, you may wish to contact an buying or selling, the financial interests independent financial adviser. of existing investors may be protected Within the tax-free Junior ISA umbrella by the charging of a dilution levy when you can invest in one or more of the shares are bought or sold. See page 7 following two forms of savings or for more details. investment: Details of all the risks are available Stocks and Shares (either directly or via within the full prospectus which is a collective investment scheme such as available on request. an OIEC, a unit trust, an investment trust or via a life insurance policy). Questions and answers A Cash Deposit Account (not offered by Scottish Friendly). Who can apply? What are the tax advantages? You are eligible to apply if your child is under 18, didn’t qualify for a Child Trust A Junior ISA is a savings or investment Fund and is a UK resident. plan where your Junior ISA proceeds are free from UK income tax and capital What is a Junior ISA?? gains tax. However, as with any tax-free The Junior ISA is an Individual Savings investment such as a pension or ISA, Account for children and allows any any UK dividend income is received after the deduction of corporation tax. investments to grow free of tax. It can be taken out by anyone with parental When the Junior ISA plan value is paid responsibility for a child and which allows out to the child at the age of 18, the any investments to grow free of tax. lump sum is free of any tax charge. When the child turns 18, the plan value can be accessed and becomes the legal property of the child. Stocks and Shares Junior ISA Page 3 How much can I or anyone invest Who can invest in a Junior ISA? in a Junior ISA? Once setup anyone can invest in a Anyone can make single payments from child’s Stocks and Shares Junior ISA: £50 by one-off Direct Debit or monthly parents, guardians, grandparents, payments from £10 by regular Direct aunts, uncles, family friends. Debit. How can I pay into the Junior ISA? The maximum you can invest in a Stocks You or anyone else can make single and Shares Junior ISA for any Year is payments by cheque or monthly £4,128 minus anything you have paid payments by Direct Debit. If investing with into a Cash ISA in that Year. a single payment, your application should Anyone can invest in a Junior ISA but it be returned directly with your cheque. If can only be set up (opened) by someone you wish to invest monthly, complete and with parental responsibility for the child. return the Direct Debit on the application form. Top-up contributions during the What types of Junior ISA does tax year should be made in writing Scottish Friendly offer? accompanied with a cheque. Scottish Friendly offers a Stocks and Shares Junior ISA with a choice of Can regular payments be changed? investment into our OIEC funds.